IPO Report: GitLab IPO: 5 things to know about the all-remote software company valued at $11 billion

GitLab Inc. is an all-remote software company that will command a valuation of $11 billion when it goes public Thursday.

will raise more than $800 million in a 10.4 million-share offering, at a price of $77 a share. That’s well above its previously expected pricing range, which was raised on Tuesday to between $66 and $69 a share from between $55 and $60 a share last week.

The company filed initial paperwork for its IPO with the Securities and Exchange Commission in mid-September, and is expected to trade on the Nasdaq under the ticker symbol “GTLB” on Thursday.

GitLab specializes in so-called DevOps software, which allows software developers and operators to collaborate on projects to provide faster and more relevant software updates to their internal systems on a near-constant basis. The software allows a company’s development, operations, IT, security and business teams to all work on a common platform.

Goldman Sachs, J.P. Morgan, B. of A. Securities, UBS Investment Bank, and RBC Capital Markets are among the underwriters, and 143 million shares are expected to be outstanding after the offering, or 143.5 million if overallotment options are exercised by underwriters.

Here are five things to know about the company from its SEC filings.

They’ve got some competition

The company said it considers Atlassian Corp.’s

collaboration software such as Jira a competitor, but GitLab’s main competitor is the similarly named GitHub, which was acquired by Microsoft Corp.

in 2018 for $7.5 billion. That might explain why GitLab lists its cloud hyperscale partners as Inc.’s

AWS and Alphabet Inc.’s


Google Cloud, which offer the company’s platform, with Microsoft’s Azure noticeably missing.

GitLab said the market for its DevOps platform is about $40 billion, based on data from Gartner. With an infrastructure software market of $328 billion at the end of 2021 and an expected $458 billion by the end of 2024, GitLab believes it can serve $43 billion of this market by the end of 2021 and $55 billion of it by the end of 2024.

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GitLab claims a steady increase in annual recurring revenue, or ARR, a software-as-a-service metric that shows how much revenue the company can expect based on subscriptions. Base customers — those with $5,000 or more in ARR — grew to 3,632 by the end of July, compared with 2,745 at the end of January and 1,662 at the end of January 2020.

As of the end of July, GitLab said $100,000 or more ARR customers grew to 383 from 219 the year before, and $1 million ARR customers grew to 27 from 15.

They were work-from-home before it was cool

GitLab said it believed it was the largest all-remote company in the world before the COVID-19 pandemic forced many more workforces to go remote. In fact, on the SEC filing in the place where a company usually lists the physical address of its headquarters, GitLab lists “Address Not Applicable.”

GitLab has been “100% remote since inception,” when co-founder Dmitriy Zaporozhets first came up with GitLab from his house in Ukraine that didn’t even have running water. CEO and co-founder Sytse Sijbrandi found GitLab from his house in the Netherlands and the two incorporated GitLab in 2014 and became of beneficiary of tech accelerator Y Combinator in 2015.

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With 1,350 employees in more than 65 countries, GitLab said its remote-only organization “allows us access to a global talent pool that enables us to hire talented team members, regardless of location, providing a strong competitive advantage,” and allows the company to help other companies handle their newly remote workforces.

That strength, however, is also listed as a risk factor in the company’s S-1 filing. GitLab said “technologies in our team members’ homes may not be robust enough and could cause the networks, information systems, applications, and other tools available to team members and service providers to be limited, unreliable, or unsecure.”

They are NOT here to create a ‘family’

GitLab comes across as very direct in its S-1, without a lot of the corporate-culture platitudes that many tech companies espouse.

“Some companies talk about being a ‘Family,’” Sijbrandi in his letter to investors. “We don’t think that is the right perspective. At GitLab, the relationship is not the end goal. The goal is results. We are clear about accountability and hold people to a clearly articulated standard. When people do not perform, we try to help them improve. If they still can’t meet expectations, we let them go.”

For GitLab, “results” mean not doing things differently for the sake of being different, using “boring solutions whenever possible,” having a new version of its software out on the 22nd of every month, and empowering the employee who has to do the work resulting from a decision with the ability to make that decision.

Lower-tier services have been ditched

GitLab said it offers three services: Free, “premium” for $19 a month for each user, and “ultimate” for $99 a month for each user.

The company said it discontinued two other paid tiers, starter and bronze, and that those users will need to choose from the three new offerings or stop using GitLab. Customers using the starter and bronze levels accounted for 11% of revenue for the six months ending July 31, compared with 16% at the end of fiscal 2021, and 27% at the end of fiscal 2020.

GitLab reported sales of $152.2 million and loss of $192.2 million in 2020, compared with revenue of $81.2 million and a loss of $130.7 million in 2019. For the first half of 2021, the company reported revenue of $108.1 million and a loss of $68.1 million, compared with revenue of $63.9 million and a loss of $43.5 million for the first half of 2020.

As with most recent IPOs, don’t expect any votes

The offering is for Class A shares, which receive one vote, compared with Class B shares, which receive 10 votes. Following the offering, Class B shareholders will command 99.1% of the votes.

Venture funding for GitLab started with seed money from Y Combinator and Khosla Ventures in 2015, and after subsequent funding rounds with other firms, the company has raised $414.9 million in early investments, according to Crunchbase.

After the offering, Khosla is expected to have 14.3% voting power, Iconiq Strategic Partners will have 11.7%, August Capital will have 11.3%, and GV 2017 will have 6.7%. Sijbrandi, who is CEO of the company he co-founded, will hold 16.7% of the voting power.

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